Me, I don't know which way VFSTX should be classified. I do, however, feel strongly that Vanguard should classify it consistently!

(VFSTX has an average duration of 2.2 years. Vanguard gives it a 1 on its 1-5 risk scale, same as Short-Term Bond Index, and less than the 2 it gives Total Bond Market. Vanguard says VFSTX "Offers potential for more income than a money market fund. Appropriate choice for investors with short-term goals who can afford slight risk for the chance of higher returns.")

It appears to me that the Vanguard tool does not properly handle funds of funds. It seems to look at the predominate fund holdings and consider that the entire fund has that characteristic. I use to own the LS Conservative Growth fund and experienced the same problem. I'm not sure how they handle target retirement funds.

To addda insult to injury, the Portfolio analysis tool won't correctly analyze VG's own VA assets (eg, the % int'l included in the Balanced Fund). It's such a poor tool that long ago I created an Excel spreadsheet instead.

Last edited by Beagler on Tue Jul 20, 2010 1:55 pm, edited 1 time in total.

“The only place where success come before work is in the dictionary.” Abraham Lincoln. This post does not provide advice for specific individual situations and should not be construed as doing so.

nisiprius wrote:...isn't even accurate on Vanguard's own funds! This thing is an embarrassment to Vanguard....Me, I don't know which way VFSTX should be classified. I do, however, feel strongly that Vanguard should classify it consistently!

Have you reported this problem to Vanguard? I reported a separate problem with the portfolio analysis tool recently via the vanguard website "email" feature. The problem was fixed.

Software bugs which aren't reported to someone who can do something about them won't be fixed.

I have found the tool very useful in analyzing my simple 4-fund portfolio, and use it regularly for rebalancing purposes. It even incorporates funds I have with another company (401k). To me, the AA pie chart on this page is one of the two most important pieces of information available on the Vanguard website, the other one being net cash flow.

I think the reason it is not splitting up the Life Strategy fund is because the fund's AA is not static - and the tool probably depends on static (strategic) AA data which is not available for funds that implement tactical AA.

nisiprius wrote:...isn't even accurate on Vanguard's own funds! This thing is an embarrassment to Vanguard....Me, I don't know which way VFSTX should be classified. I do, however, feel strongly that Vanguard should classify it consistently!

Have you reported this problem to Vanguard? I reported a separate problem with the portfolio analysis tool recently via the vanguard website "email" feature. The problem was fixed.

Software bugs which aren't reported to someone who can do something about them won't be fixed.

OK, fair enough, I'll do it.

I have mixed feelings, though, because submitting a high-quality actionable bug report is not at all cost-free, and I have, in the past, wasted a reasonable amount of valuable time reporting bugs to organizations that didn't want to hear about them. In the seventies and eighties, I felt that reporting bugs was well worthwhile; recently, I've felt that most organizations are not interesting in hearing about bugs from anyone but their own SQA departments.

But I said I'd do it, and I will.

Do you know of any better channel than a regular "secure email" via Vanguard's message facility?

nisiprius wrote:recently, I've felt that most organizations are not interesting in hearing about bugs from anyone but their own SQA departments.

Indeed. Many front line support organizations seem to be skilled at keeping information about software defects away from the people who actually can do something about them..

Do you know of any better channel than a regular "secure email" via Vanguard's message facility?

Unfortunately, no.

(If it's any consolation I spent about two hours on the phone this spring with someone from Intuit getting them to reproduce a bug in how TurboTax handled the Massachusetts health care mandate in non-resident/part-year returns. The bug was fixed a couple weeks later).

At one point of time the Total International fund of funds was not being split properly in the tool. I reported it to Vanguard via email on the site, got a polite response, and it was eventually fixed.

sommerfeld wrote:(If it's any consolation I spent about two hours on the phone this spring with someone from Intuit getting them to reproduce a bug in how TurboTax handled the Massachusetts health care mandate in non-resident/part-year returns.

Oh, man, oh man, oh man. Reminds me of a similar issue I had a few years ago.

The bug was fixed a couple weeks later).

Well, your two hours were well spent, then, and I extend to you my sincere congratulations. It's not just anyone that can get Intuit to act on a bug.

The last time I played with the tool I noticed that a change in stock allocation decreased my holdings in value stocks according to the Investment Style Analysis section (which shows value / blend / growth) and increased by holdings in value stocks according to the 9 Box section (M* type v/b/g and small / medium / large).

DartThrower wrote:Vanguard is working on a redesign of their website. Let's hope they are putting significant effort into addressing the problems that plague the current Portfolio Watch tool.

.
For those having problems with the Portfolio Watch tool I hope they do "improve" things, however, your comment that they are working on a redesign of their website has me concerned. I find Vanguard's web site to be one of the easiest fund company site for me to use. For example, I always have trouble finding what I am looking for on Fidelity's site.

I really hope they put their effort into fixing features such as the Portfolio Watch tool and leave the overall layout/feel of the site alone as it is one of the best, in my opinion.

stratton wrote:If you really want to get confused on Morningstar look at the portfolio of Pimco funds. Their software can't handle the swaps.

Paul

Paul, please clarify your comment. It seem to me that the swaps represent long and short positions in some underlying FI security that mostly expire in less than a year and therefore are considered as "cash" instruments. M* reflects this in its portfolio view as a long/shot cash position. Now it might be confusing but I'm not convinced that the swaps aren't being properly "handled" by the software.

A scientist looks for THE answer to a problem, an engineer looks for AN answer. Investing is not a science.

I reported it via Vanguard's message system, under category "other," and received a reply saying that action will be taken:

Thank you for your e-mail and screenshots. We apologize for any difficulty you've experienced with the Portfolio Analysis tool.

We are investigating the classification information that you provided for us concerning the Portfolio Analysis tool. Once we are able to determine the cause of the inconsistencies within this tool, we will notify you by e-mail. Your patience in this matter is appreciated.

Out of curiosity, does anybody here actually use these Vanguard web tools to make investment decisions, or do you use them solely for hobby/entertainment purposes? I'd suggest that only the latter is appropriate.

I wouldn't trust an online tool to make decisions, even if the tool comes from the fund company that owns the funds that you input into the tool.

- DDB

"We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern, and less materialism in young people." - PB

ddb wrote:Out of curiosity, does anybody here actually use these Vanguard web tools to make investment decisions, or do you use them solely for hobby/entertainment purposes? I'd suggest that only the latter is appropriate.

Well, let me put it this way. It wasn't a very important decision, but yes. Well, sort of.

The first time I ran Portfolio Analysis it gave me a red warning message about the risks of foreign stock investing, and said my foreign stock percentage was something like 23% or 24%. I was surprised, because I thought it was 20%, and 20% happened to be what I wanted.

With a little tinkering, I found that it was quite correct. I had been including only my actual foreign-stock funds (e.g. Vanguard Total International Index). But I was also holding Pax World Balanced Fund and had overlooked the fact that this fund had a significant foreign-stock allocation.

So I trimmed back to 20%. Of course before I took action, I did my own spreadsheet calculations. And of course it was all silly and inconsequential anyway.

But if you accept the premise that I wanted 20%, the tool alerted me to the fact that I didn't have 20%, and I did take action to tweak it to the exact magic arbitrary meaningless round number I'd decided on for no very good reason.

When I got it back to 20%, the Portfolio Analysis tool was happy, by the way, and quit giving me the red warning.

ddb wrote:Out of curiosity, does anybody here actually use these Vanguard web tools to make investment decisions, or do you use them solely for hobby/entertainment purposes? I'd suggest that only the latter is appropriate.

Well, let me put it this way. It wasn't a very important decision, but yes. Well, sort of.

The first time I ran Portfolio Analysis it gave me a red warning message about the risks of foreign stock investing, and said my foreign stock percentage was something like 23% or 24%. I was surprised, because I thought it was 20%, and 20% happened to be what I wanted.

Thanks for sharing. I'm glad you confirmed the results yourself prior to taking action, but I do see that the tool is potentially useful for giving alerts. Then again, if the tool had incorrectly classified, say, the PAX fund is 100% domestic, then you wouldn't have known to take action and still would have been better off relying on your own spreadsheet analysis.

- DDB

"We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern, and less materialism in young people." - PB

Our total fees are lower, as compared to just FIDO.FIDO tools (which I use extensively) are much better than VG.

- Ron

Kind of an aside. I was just comparing two funds and noticed that Vanguard had a 0.8 % e/r for a non-Vg fund. I know that the e/r is only 0.4% so I decided to check Fido. Fidelity's "research pages" are currently unavailable.

So with Fido I get high cost and no data and with Vanguard I get low cost and wrong data. Which to choose? Decisions, Decisions.

(BTW the e/r difference is due to Vg using prospectus info rather than what it actually is. Very misleading.)

A scientist looks for THE answer to a problem, an engineer looks for AN answer. Investing is not a science.

The Life Strategy Conservative Growth fund has the Short Term Investment Grade fund as part of its holdings, and this is what's being listed as short term reserves, which is not accurate. The allocation showing 55% bonds is more representative of the actual holdings.

Here is Vanguard's somewhat confusing response to my report to them mentioned above, concerning mis-characterization of VPGMX as a domestic rather than international holding.

Vanguard Web Technical Support Services wrote:Dear Mr. xxxxxx:

Thank you for your recent e-mail. We appreciate the time that you havetaken to contact us regarding our Portfolio Watch tool.

On 7/26/2010, you had sent us an e-mail requesting that we research anissue with our Portfolio Watch tool and how it is characterizing theVanguard Precious Metals and Mining Fund (VGPMX) as a domestic allocation.Our technical team has concluded their research on this issue. I haveprovided the following information that will explain this issue:

Our Portfolio Watch tool categorizes funds based on their targetallocations. The Vanguard Precious Metals and Mining Fund is a domesticstock fund, from a category standpoint. Our methodology is that domesticstock funds are treated as 100% domestic in the Portfolio Watch tool, eventhough the fund has 84-86% in International Funds. While we recognize thatthis methodology is not really the best way to categorize this fund, thetool is currently functioning as designed.

Our technical team is aware of this issue and is currently researching howwe can properly configure this tool to display a more accuratecategorization for funds such as this one. We do appreciate your feedbackon this issue. Your suggestion will be forwarded to our management team fortheir review.

If you have additional questions, please call Vanguard Voyager SelectServices at 800-284-7245 and ask to speak with a web technical supportspecialist. You can reach us on business days from 8 a.m. to 7 p.m.,Eastern time.

"Everything should be as simple as it is, but not simpler." - Albert Einstein
| Wiki article link:Getting Started

It is bad that these problems exist but what is worse is that they won't fix them even when bug reports are submitted. Shame on Vanguard. If they were as sloppy on the rest of their website as they are in their portfolio analysis tool, I would leave them. It must not be the same computer programmers that handle both.

SpringMan wrote:It is bad that these problems exist but what is worse is that they won't fix them even when bug reports are submitted.

huh? what part of

Our technical team is aware of this issue and is currently researching how we can properly configure this tool to display a more accurate categorization for funds such as this one.

did you not understand? they're going to fix it but (for reasons they don't disclose) it's not a quick fix. If I had to guess, they likely need to rewrite how information percolates through the code and it's likely a bigger job than it appears.

I've been in software long enough to know that it's best to not rush bugfixes; better to wait for the correct fix.

SpringMan wrote:It is bad that these problems exist but what is worse is that they won't fix them even when bug reports are submitted.

huh? what part of

Our technical team is aware of this issue and is currently researching how we can properly configure this tool to display a more accurate categorization for funds such as this one.

did you not understand? they're going to fix it but (for reasons they don't disclose) it's not a quick fix. If I had to guess, they likely need to rewrite how information percolates through the code and it's likely a bigger job than it appears.

I've been in software long enough to know that it's best to not rush bugfixes; better to wait for the correct fix.

I reported this bug on July 21 and it is still not fixed, see my earlier post. It remains broken and I will be surprised if it is fixed anytime soon.

Surely they know what sector percentages are in the US stock market, they had it right in earlier releases. My comment was not specifically directed at the precious metals and mining being 100% domestic which I did report several years ago by the way. By these problems, I was referring to the entire thread not one specific post. Also, I had a 40 year career in software development and no place I worked would tolerate their lackluster support.

SpringMan wrote:It is bad that these problems exist but what is worse is that they won't fix them even when bug reports are submitted.

huh? what part of

Our technical team is aware of this issue and is currently researching how we can properly configure this tool to display a more accurate categorization for funds such as this one.

did you not understand? they're going to fix it but (for reasons they don't disclose) it's not a quick fix. If I had to guess, they likely need to rewrite how information percolates through the code and it's likely a bigger job than it appears.

I've been in software long enough to know that it's best to not rush bugfixes; better to wait for the correct fix.

Similar problems with this tool have been reported to VG many times over the past several years, and the response has always been a form of "we know and we're working on it." While it's ok for VG to simply not fix the problems, it should post a prominent disclaimer regarding the glaring inaccuracies. Clearly the tool misrepresents an account's actual allocation, enough to cause an unsuspecting person to believe (s)he has a dramatically different allocation than is actually the case.

One of my specific complaints in the past has been that my non-VG funds are correctly categorized, while my VG funds aren't. The last I checked that was still true.

Paul

Last edited by tibbitts on Tue Jul 27, 2010 12:49 pm, edited 2 times in total.

It's not so much a bug as it is a lack of desire to enter the thousands of holdings for each mutual fund into a database each quarter and then categorize all those holdings to get the appropriate percentages. It's a fairly labor intensive process when you figure there are thousands of funds out there and no standardized way of reporting holdings.

Though you would think this would be easy enough for Vanguard to do for their own funds. Perhaps they get the data for all funds from a third party, and the third party doesn't do anything special for Vanguard funds.